LINGALA PERAIAH,KADIYAM vs. ITO, WARD-1, KAKINADA

ITA 453/VIZ/2026Status: DisposedITAT Visakhapatnam13 August 2026AY 2021-2238 pages
AI SummaryAllowed

What were the facts?

The appeals were filed by various assessees, employees of Bharat Sanchar Nigam Limited (BSNL), against orders of the Commissioner/Addl./Joint Commissioner of Income Tax (Appeals). The assessees had opted for the Voluntary Retirement Scheme (VRS) – 2019 and received ex-gratia compensation. They initially offered this compensation to tax in their returns, which were processed under Section 143(1). Subsequently, they sought exemption under Section 10(10B) of the Income-tax Act, 1961, before the appellate authorities, claiming ignorance of law or incorrect professional advice. The appellate authorities dismissed these appeals, citing delays, lack of sufficient cause for condonation, or the non-maintainability of fresh claims at the appellate stage, and in some cases, distinguishing the BSNL VRS from retrenchment compensation.

What did the Tribunal hold?

The Tribunal condoned the delays in filing the appeals, following numerous decisions of various Benches of the Tribunal and the High Court of Telangana, which had allowed similar condonation for BSNL employees. On the primary issue, the Tribunal held that the compensation received by BSNL employees under the Voluntary Retirement Scheme – 2019 is exempt under Section 10(10B) of the Act. The Tribunal relied on consistent judicial precedents from various Benches of the ITAT and the High Court of Telangana, which held that the BSNL VRS-2019, in essence, partook the character of a retrenchment compensation due to the financial situation of BSNL, making it eligible for exemption under Section 10(10B). The Tribunal directed the Assessing Officer to verify the claims and allow the exemption accordingly. Regarding the fresh claim for exemption under Section 10(10AA)(i) for leave encashment, the Tribunal admitted the additional ground as a legal issue, following the Supreme Court's decision in National Thermal Power Corporation Ltd. v. CIT. However, since the facts regarding the conditions for claiming this exemption were not readily available, the issue was set aside to the file of the Assessing Officer for verification and decision in light of the provisions of Section 10(10AA)(i) and the decision of the Hon'ble Kerala High Court in Sanchar Nigam Pensioners Welfare Association v. Union of India.

What were the issues?

1. Whether the delay in filing appeals before the Commissioner/Addl./JCIT(A) and subsequently before the Tribunal is to be condoned, considering the assessees' claim of ignorance of law and subsequent discovery of favorable judicial precedents regarding the BSNL VRS-2019. 2. Whether the compensation received by BSNL employees under the Voluntary Retirement Scheme – 2019 is eligible for exemption under Section 10(10B) of the Income-tax Act, 1961, or if it falls under Section 10(10C) as a voluntary retirement scheme. 3. Whether a fresh claim for exemption under Section 10(10AA)(i) for leave encashment can be entertained at the appellate stage. Assessee's Contentions: The assessees argued that the delay was due to ignorance of law and incorrect professional advice, and that similar claims by other BSNL employees had been allowed by various judicial forums. They contended that the BSNL VRS-2019, despite its nomenclature, was in effect a retrenchment scheme due to BSNL's financial difficulties, making it eligible for exemption under Section 10(10B). They also argued that the leave encashment exemption was a legal issue that could be raised at any stage. They relied on decisions from various ITAT Benches and the High Court of Telangana. Revenue's Contentions: The Revenue contended that the appeals were barred by limitation due to inordinate delays and that the assessees had not established sufficient cause for condonation. They argued that fresh claims for exemption could not be entertained at the appellate stage, citing the Supreme Court's decision in Goetze (India) Ltd. vs. CIT. They also argued that the BSNL VRS-2019 was not retrenchment compensation but a voluntary retirement scheme covered under Section 10(10C), and that facts regarding leave encashment needed verification.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 10(10C),Section 10(10AA),Section 143(1),Section 246(1),Section 119(2)(b)

AI-generated summary — verify with the full judgment below

आयकर अपीलीय अधिकरण, धिशाखापत्तनम पीठ, धिशाखापत्तनम INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM BENCH: SMC BEFORE SHRI VIJAY PAL RAO, HON’BLE VICE PRESIDENT & SHRI MANJUNATHA G, HON’BLE ACCOUNTANT MEMBER

ITA 333 & 334/VIZ/2026 (निर्धारण वर्ा/Assessment Year: 2020-21 & A.Y. 2021-22) NAGA VENKATA PARDHA SARADHI INCOME-TAX OFFICER, WARD-2(1) NAMBURU INCOME TAX OFFICE, 11-336/3, PLOT NO 70, KRISHNA DIST.-522503, ANDHRA PRADESH ANDHRA PRADESH अपीलधर्थी Appellant प्रत्यर्थी Respondent

Permanent Account Number of Assessee: ABHPN8220B

Ld. Addl/JCIT(A), Kochi vide DIN: ITBA/APL/S/250/2025-26/1087099690(1) Appealed Against the order for the A.Y. 2020-21 dated 09-Mar-2026 for the Assessment Year 2020-21. Ld. Addl/JCIT(A), Kochi vide DIN: Appealed Against the order for the A.Y. 2021-22 ITBA/APL/S/250/2025-26/1086603782(1) dated 26- Feb-2026 for the Assessment Year 2021-22. ITA 372 & 373/VIZ/2026 (निर्धारण वर्ा/Assessment Year: 2020-21 & A.Y. 2021-2022) VENKATA SATYA SRIKUMAR INCOME TAX OFFICER, WARD-2(5), INCOME TAX OFFICE, DONKADA INFINITY TOWERS, 29-36, PHASE1, SVLN VUDA LAYOUT, SANKARAMATAM ROAD, NEAR SIMHAPURI COLONY, Vs. V

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